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University of Connecticut

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Economics Working Papers

Department of Economics

2-1-2004

Efficiency and Continuity in Public Finance: The


Ottoman System of Taxation
Metin M. Cosgel
University of Connecticut

Recommended Citation
Cosgel, Metin M., "Efficiency and Continuity in Public Finance: The Ottoman System of Taxation" (2004). Economics Working
Papers. Paper 200402.
http://digitalcommons.uconn.edu/econ_wpapers/200402

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Published in Review of Social Economy, 2004, 33(3): 329-341.

Department of Economics Working Paper Series


Efficiency and Continuity in Public Finance: The Ottoman System of Taxation
Metin M. Cosgel
University of Connecticut

Working Paper 2004-02R


February 2004, revised October 2004

341 Mansfield Road, Unit 1063


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This working paper is indexed on RePEc, http://repec.org/

Abstract
Economic historians have recently emphasized the importance of integrating
economic and historical approaches in studying institutions. The literature on the
Ottoman system of taxation, however, has continued to adopt a primarily historical approach, using ad hoc categories of classification and explaining the system
through its continuities with the historical precedent. This paper integrates economic and historical approaches to examine the structure, efficiency, and regional
diversity of the tax system. The structure of the system made it possible for the Ottomans to economize on the transaction cost of measuring the tax base. Regional
variations resulted from both efficient adaptations and institutional rigidities.

This working paper previously circulated under the title The Economics of
Ottoman Taxation

EFFICIENCY AND CONTINUITY IN PUBLIC FINANCE:


THE OTTOMAN SYSTEM OF TAXATION
Metin M. Cogel
Metin M. Cogel is Professor in the Department of Economics, The University of Connecticut,
Storrs, CT 06268, USA; email: Cosgel@uconn.edu.

Economic historians have recently made great progress in studying the past by applying the tools
and concepts of New Institutional Economics. A fundamental element of this achievement has
been to go beyond the narrow confines of previous approaches. Whereas the applications of
narrow neoclassical economic analysis had typically lacked an appreciation for the role of
history and focused primarily on the efficiency properties of institutions, the new trend has been
to integrate economic and historical approaches for richer and more comprehensive explanations
of how and why history mattered. Similarly, whereas unsystematic historical approaches had
lacked sound theoretical basis and proceeded narrowly by focusing on how previous customs and
traditions were responsible for the existence of an institution, the new approach has been to also
examine the properties of the institution that ensured its survival.
The literature on Ottoman taxation, however, has somehow failed to benefit from these
developments. A narrow historical approach has dominated the literature, as scholars have
studied the regional, legal, political, and economic complexities of the tax system primarily by
identifying continuities with the historical precedent in the Islamic law, the Byzantine state, or
various other institutions of previous states. The Ottomans are said to have adopted the local

customs and methods of taxation that they inherited in a newly conquered region, combining
with the tax codes of other regions as necessary. Referring to the Sultanic law code for land
holding and taxation, Halil nalck provides this type of an explanation when he writes: It was
this law code, actually a combination of Islamic and local practices related to the RomanByzantine legacy, which administered the relationships in Ottoman landholding and taxation.
In an exemplary statement of how the dominant historical approach has tried to explain the tax
system, he continues: In fact, the system was closely analogous to that of previous Islamic and
Byzantine states, and there was no reason for the Ottomans to revolutionize tested methods as
long as the state received its revenues. 1
While nalcks statement may be accurate in general terms, it cannot be taken as the
basis for an argument against using a systematic, theoretical approach. Although the similarities
between the tax systems of the Ottomans and their predecessors seem to support a narrow
historical approach, identifying the historical precedents of tax categories does not by itself
provide a complete explanation for why a certain mixture of taxes, and not something else, was
adopted. The origins and the persistence of a tax system are different things. The key problem
with nalcks approach is that it does not explain why the Ottomans chose certain elements of
the Islamic or Byzantine legacy and not others. That there were many components of previous
tax systems, such as labor services, that the Ottomans carefully and systematically discontinued
suggests the presence of some rules and a selection process that kept some elements of previous
systems and discarded others. While conquering land from multiple predecessor states, the
Ottomans inherited the tax systems of multiple legal and political traditions that needed to be
molded into a coherent whole. History did matter, of course, at least by way of providing a
menu of choices available to the Ottomans and in shaping the regional variety. But a satisfactory
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explanation of the system as a whole demands that an appeal to history must be complemented
with knowledge of the general structure of taxes and the forces that affected the Ottomans
choice of one type of precedent over the others.
This paper aims to study the Ottoman system of taxation by integrating economic and
historical approaches. Borrowing insights from recent developments in New Institutional
Economics and using information from the published tax registers of the Ottoman Empire, I
examine the overall structure and efficiency of the system and the way it was shaped by regional
conditions and institutional history. Three objectives thus guide the inquiry. The first is to
identify the general structure of the tax system. Although historians have proposed various ways
of classifying Ottoman taxes, they have typically chosen ad hoc categories of classification,
failing to determine the general structure of taxes or a mechanism to distinguish between them
systematically. I construct an economic classification of taxes that depend on systematic
differences in the tax base.
The second objective of the paper is to examine the efficiency of the tax system.
Identifying the general structure of taxes makes it possible to ask why this, rather than some
other, structure was chosen. Adopting an economic approach and focusing on the efficiency
properties of the system, I argue that the choice of how to levy taxes on an item or activity was
determined primarily by the cost of measuring the tax base.
The third objective is to explain the regional diversity of Ottoman taxes. Despite sharing
a common structure, taxes varied significantly among the regions of the Ottoman Empire in
names, bases, and rates. Some of these variations can be viewed simply as efficient adaptations
of the system to local conditions. But a satisfactory explanation of the system as a whole
requires that we integrate economic and historical approaches by studying not just how the

Ottomans were able to transform some taxes for efficiency but also how institutional rigidities
prevented them from transforming others.

THE EFFICIENCY AND PATH-DEPENDENCE OF INSTITUTIONS


Methodological differences between the narrow variants of the economic and historical
approaches originate primarily from the contrast between their views of institutions. In a narrow,
ahistorical economic approach, an institution is simply the efficient solution to an economic
problem. In this view, a process of competition would weed out inferior institutions, ensuring
the survival of only those that best solve the problem. Institutions are thus endogenous responses
to the environment, outcomes of some sort of a selection process that generates efficient results.
It follows that changes in the environment (e.g., prices, technology) would create incentives to
alter existing institutions and to construct new ones better suited to the new environment. The
economic historians task then becomes to simply identify the economic problem and the
competitive forces responsible for the existence of an institution.
According to an equally narrow historical view, competitive forces do not affect
institutions. History is what matters. From an atheoretical and unsystematic historical approach
to institutions, their existence is not directly associated with a particular property like equity or
efficiency. An institution may survive not because it was a static efficient response to an
economic problem but because it was the product of a dynamic and irreversible historical process
in which past institutions determine the nature and evolution of those that exist today and in the
future. To explain the prevalence and divergent paths of institutions, we need to examine their
history.

Whereas some of the early works in economic history may have been from narrow
variants of economic or historical perspectives, recent contributions have increasingly
recognized the deficiencies of a one-sided narrow approach and aimed to bridge the gap between
them. Economic historians would now generally agree that both competitive and historical
forces matter in shaping institutions. The challenging task is to determine how exactly to
integrate the two types of approaches for a complete explanation. The influence of history is
sometimes described in economic history by the term path dependence, referring to the way
outcomes are generated by allocative processes that are unable to break free from their own
history. We need to know not only which institutions best served particular needs but also how
societies often had distinct institutional trajectories that did not yield to competitive forces and
why some societies could not easily transplant more successful institutions of other societies.
Approaching from the other side of the explanatory scheme, we need to know how and why
some institutions managed to break free from their historical path.
The importance of integrating multiple perspectives may be most evident in New
Institutional Economics, where leading proponents have shifted positions from adopting an
efficiency view of institutions to recognizing the importance of path-dependence. Douglass
North, a Nobel Laureate pioneer of the New Institutional approach in economic history, has
explicitly abandoned the efficiency view of institutions and proposed a more comprehensive
analysis of institutions, institutional change, and economic performance. 2 In addition to
providing historical richness, New Institutional Economists have developed the tools and
concepts of modern institutional political economy and used them to explain how and why
history mattered. In other words, they have brought systematic theory to the task of explaining
institutions. Some of the recent influential studies of the Middle Eastern institutions have also

come from this perspective as can be seen in the works of Timur Kuran and Avner Greif. 3 It is
now time to apply insights from these developments to examine the Ottoman tax system.

THE GENERAL STRUCTURE OF THE OTTOMAN SYSTEM OF TAXATION


Studies of the Ottoman system of taxation typically use the detailed information recorded
in imperial registers (defter-i hkan) for source. Upon conquering new lands, the Ottomans
typically surveyed all taxable resources and activities and recorded the information in tax
registers commonly known as the tahrir defterleri. As circumstances changed over time, they
conducted subsequent periodic surveys in order to update the information on the empires current
sources of revenue. The registers were used for a variety of purposes, including serving as
official records to establish legal claims to land, assessing the empires expected tax revenues,
and appropriating some of the revenues to the military and administrative officials as
remuneration for their services. Fortunately, many of these registers have survived to the
present, available to researchers in various archives in Turkey and other countries that were
previously under Ottoman domination, making it possible to study the Ottoman system of
taxation in great detail. 4
At the beginning of each districts register was its tax code, a document called
knnnme. 5 Tax codes show that the Ottomans did not use complicated tax instruments like the
income tax or the value added tax for public finance, because they faced various constraints in
their capacity to gather the information required to administer taxes. Instead, they relied on
simpler and more feasible taxes like lumpsum taxes on shops, personal taxes with standard rates
within a district or province, and production taxes that were collected as simple proportions of
output or based simply on the amounts of land or another input. Because taxes were levied on

numerous groups of persons and activities, however, the resulting system was still inevitably
complex. The types and rates of taxes could vary significantly between regions, making the
system more complicated. It must have been complicated enough, even perhaps for the
governments own agents, that the government felt obligated to carefully lay out the basic tax
regulations of each district in a formal code and to specify the rates at which each tax was to be
collected in different circumstances.
To reduce the complexity of taxes, we need to classify them by using a coherent standard.
Previous classifications of taxes, however, have not been satisfactorily coherent or enlightening.
Whereas some historians have examined each tax in isolation and thus avoided the problem of
classification, others have classified them based on ad hoc or purely legal, rather than economic,
categories. As an example of the former, Neet aatay described taxes in an encyclopedic style
by taking them in an alphabetical order, making no attempt to group them into categories. 6
Although this work, as one of the earliest studies in the field, undoubtedly contributed to our
understanding of the Ottoman system of taxation, such an approach is ultimately incomplete and
unsatisfactory because it fails to provide the framework around which each of these taxes were
collected. As an example of the latter, nalck grouped tax revenues recorded in the tax registers
into four groups: personal taxes, tithes, various fees and fines, and extraordinary levies. 7
Lacking a clear theoretical basis, however, this ad hoc classification is also unsatisfactory and
confusing. It is not clear, for example, why fees on some agricultural products and fines on
criminal misdemeanors belong to the same category, and how tithes are to be distinguished from
other taxes on agricultural products. Although the distinction between categories may have been
based on the method of collection (cash vs. in-kind), this does not explain why personal taxes,
collected in cash, were put in a separate category than fees and fines.

Ottoman taxes have also been studied within a legal framework by distinguishing
between Islamic and customary taxes. 8 For example, whereas the tithes had a well-established
basis in Islamic taxation, some of the personal taxes used by the Ottomans had no clear basis in
the Islamic law. Although the distinction between the Islamic and customary taxes may have
been useful in identifying the legal precedent for taxes, it does not help to understand the basic
structure of the system as a whole. It does not help to distinguish between the taxes found within
each category or to similarly identify commonalities between the taxes found in the two
categories. For example, distinguishing between the Islamic and customary origins of taxes does
not help to understand the differences between various Islamic ways of taxing agricultural
products, such as the difference between the tithes used in taxing wheat and the fees used in
taxing fruits and vegetables. It similarly does not help to understand the commonalities between
taxes with Islamic and customary origins. The tithes observed in the European provinces that
the Ottomans simply preserved from the tax systems of predecessor Christian states, for
example, are essentially identical to those observed in the Arab lands, though their legal basis
may have been different. Although previous ad hoc or legal classifications of Ottoman taxes
may have served well for some purposes, they do not provide a coherent framework for
classification and a consistent procedure for differentiation. 9
Despite the enormous complexity of the Ottoman system of taxation on the surface, it had
a simple basic structure. To understand the fundamental elements of this structure, let us use
simple insights and concepts from the economic theory of taxation and follow the usual
analytical procedure of classifying taxes according to their base. A tax base is simply the item
on which the tax is levied. Ottoman tax bases can be grouped into three major categories:
personal taxes levied on the persons or households, trade taxes on the goods and services brought

to market for sale, and production taxes on various farming and manufacturing activities. The
Ottoman budgets included other sources of revenue, such as the tributes from vassal states,
profits from government owned enterprises, and revenues from various fees and fines like the
marriage fees and criminal fines. 10 Because of our focus on tax revenues, other sources of
revenue are excluded from this classification.
Legally, personal taxes resulted from the dependent status of the subjects. 11 Although
the names and rates of personal taxes could vary among regions, they were commonly levied on
the persons or households. The tax rates could vary among taxpayers, depending on their
observable characteristics like land ownership and marital status, which served as an index of
their ability to generate income and pay taxes. For example, under the conventional system of
taxing subjects, a married subject who held farm land workable by a pair (ift) of oxen paid the

ift tax, which was higher than the amount paid by bachelors (resm-i mcerred) and those
possessing less than a ift or no land (resm-i bennk). Those unable to work, such as the elderly
and the disabled, were exempted from personal taxes. 12
Table 1 shows examples of personal taxes in the Ottoman Empire during the fifteenth and
sixteenth centuries. Representing the differences in rates and the geographical diversity of the
Empire during this period, the Table includes information from such diverse districts as
Jerusalem in eastern Mediterranean, Budapest in Europe, Bursa in western Asia Minor, Erbil in
northern Iraq, and Antep and Malatya in eastern Asia Minor. 13 Personal taxes were typically
levied in cash. The rates for the ift tax, for example, were specified in terms of the Ottoman
currency of ake and varied from being 33 akes in Bursa in 1487 to 50 akes in Erbil in 1542
and Malatya in 1560.

The second general category of Ottoman taxes was the trade taxes that applied to market
exchange of goods and services. Trade taxes included customs dues and the general market tax,
exacted on items brought for exchange into towns and villages that hosted the periodic markets.
The tax base was the item brought in for trade. The tax codes, especially of districts with large
markets, specified the rates at which various goods, spices, animals, slaves, and agricultural
products were to be taxed. In some places trade taxes took the form of gate dues that applied to
items in-transit or brought in for local consumption. Items could also be taxed at ports or river
crossings. Although most trade taxes were levied in cash, the tax rates for some items were
specified in-kind. In the Jerusalem district, for example, whereas fruits brought to market were
taxed at the rate of one-thirtieth, linens were taxed at twenty akes per camel-load.
In the third category were the production taxes that applied to various productive
activities in agriculture and manufacturing. These taxes can be further divided into three
subcategories depending on the tax base: output taxes that were levied on the total output of an
activity, input taxes on one of the inputs used in production, and enterprise taxes on the activity
as a whole.
Output taxes consisted of the tithes (r), applying primarily to grains, legumes, and
fibers. Taxes on these products were to be collected in kind, as a share of the total output. The
usual rate was one tenth, typically with an additional one fortieth, called salriye, collected as
fodder for the horses of the fief-holder. As Table 1 shows, the rates could vary significantly
between regions, sometimes even between villages within a region. Despite such variations,
however, output taxes throughout the Empire had the common property of being based on the
harvested product and collected at rates specified as a percentage share of the total output. The

usual rate of one-tenth, for example, meant for the tax collector to claim his share immediately
after the harvest as ten percent of the output of wheat, barley, lentils, and so on.
Input taxes applied primarily in the taxation of fruits, vegetables, and animal products.
Taxes for these items were levied on the land, trees, or other inputs used in their production,
rather than on total output. For example, taxes on the production of fruits, nuts, and dates
depended on the number (sometimes also the age, height, and type) of trees. Similarly, taxes on
vineyards typically depended on the number of vines, taxes on vegetables depended on the
amount of land allocated to them, and taxes on animal products depended on the numbers of
animals or other inputs like beehives.
Enterprise taxes were levied not on the total output or one of the inputs used in
production but on the activity as a whole. In towns, they applied to retail stores and
manufacturing enterprises like dye-houses, tanneries, juice-makers, slaughter-houses, and soapmakers. 14 This method was also used in the taxation of agricultural production in uninhabited
lands called mezraas and in some small or remote villages. The tax rate for enterprise taxes was
specified as a lump-sum payment, presumably determined by some estimate of the profitability
of the enterprise. Because enterprise taxes were customized to activities, the tax codes typically
did not codify standardized rates for these activities (except for some rare occasions, such as
when they specified the tax rates for retail stores as per store). Because the lump sum rates
thus showed great variability in the tax registers, they are not reported in Table 1.
To show the relative importance of different tax categories for Ottoman finances, Table 2
reports the proportional share of each category in representative regions of the Empire,
calculated from the tax registers of these regions. 15 The proportions of tax categories show
significant variations among these regions and over time, probably based on such factors as

10

differences in tax rates and climatic and soil conditions. Despite these variations, one can see a
clear pattern: a majority of the tax revenue in most regions came from output taxes, and trade
taxes typically constituted the smallest proportion.

THE EFFICIENCY OF THE OTTOMAN TAX SYSTEM


Because the ultimate objective of a tax system is to maximize revenues, it is reasonable to
expect the system to be designed to raise revenues as efficiently as possible. To examine the
efficiency of the Ottoman system of taxation, let us leave aside for a moment the effect of history
and focus instead on the systems ability to solve economic problems. The issue is to explain the
logic and structure of the tax system, why the tax on some items or activities were levied on one
type of base and others on another type. For example, why were the taxes on grains typically
levied on the output, while those on fruits and vegetables levied on one of the inputs? Similarly,
why were trade taxes levied on items brought to the market for trade, rather than on the revenue
or profits from the trade or as a personal lump sum payment on the tradesman himself? Within
each broad category a number of subcategories could be observed, depending on, for example,
whether to base the input tax on land, livestock, trees, or other capital inputs; on which products
to levy output taxes, and how to determine the relevant characteristics of taxpayers for personal
taxes. Moreover, because new types of taxes could be created by mixing these categories in
many different ways, possibilities were numerous. 16
To explain various organizational forms observed in history, economic historians have
viewed them as institutional responses to the problems posed by risk and transaction costs. In a
hypothetical world without risks or transaction costs, the organization of production and
exchange activities would not affect the use of resources. But in reality both risk and transaction

11

costs exist and pose problems. The presence of risks may pose problems because if we do not
know which outcomes may realize tomorrow we would have to change the allocation of
resources and the design of institutions today in order insure against the undesirable outcomes of
tomorrow. The presence of transaction costs may also affect outcomes because if the
information required for an activity or exchange is costly and imperfect, institutions would have
to be designed to solve the information problem as cheaply as possible. Economic historians
have used risk or transaction-cost based approaches to explain various interesting organizations
and institutional arrangements observed in history.

CAN AGRICULTURAL RISKS EXPLAIN THE TAX SYSTEM?


To determine whether a risk based explanation of the structure of the Ottoman tax system
would be satisfactory, one would have to start by observing how differently risks would have
been allocated under different types of taxes. Focusing on production taxes, it is easy to see how
output taxes would have had different implications than input or enterprise taxes for how
disasters would have affected the after-tax incomes of the taxpayers. Suppose an activity was
subject to the output tax. This method would have made it possible for the taxpayer to shift part
of the production risk onto the state, because if there was a crop failure, taxes would have also
fallen proportional to the reduction in output. But if the same activity was subject to the input
tax, the crop failure would have only affected the taxpayers income because the amount of taxes
would have remained unchanged. The same was true for enterprise taxes. Under both methods,
the producer would have assumed all the risk. Output taxes would have thus provided better
opportunities for the state and the taxpayers to share risks.

12

How the difference between taxes in facilitating risk sharing would have affected the
choice of taxes would depend on the risk attitudes of the state and the taxpayers. If the state or
the taxpayers were indifferent between risky and safe incomes, for example, there would have
been no reason to expect the presence of risks to affect the tax system because it would not have
mattered which type of tax was used to generate revenue, all else being the same. But it is more
reasonable to suppose that the taxpayers were risk averse and that the state was better able to
deal with risks than taxpayers (because it was able to diversify the risk among taxpayers and
regions). In that case, a state concerned with the welfare of its taxpayers would have been
expected to accommodate their risk aversion and improve aggregate welfare by choosing output
taxes over other types in taxing an activity.
There is some frequently cited evidence from the pre-Ottoman times, dating back to the
eighth century, which seems to support the importance of risk considerations in determining the
choice between tax types in this region. Based on a petition by the peasants of Iraq during the
770s, the Caliph is said to have agreed to (re)introduce output taxes (the muqsamah method) in
order to facilitate the sharing of risks between the government and the peasants. 17 Assuming that
the risks were still high during the fifteenth and sixteenth centuries and that the means for
insuring against them were still limited, one could extend the argument to the period of the
Ottoman rule and argue that it was because of risk considerations that the Ottomans used output
taxes for grains.
A complete explanation of Ottoman taxation, however, must account for not just why
output taxes existed but also why they coexisted with input, enterprise, and other types of taxes
within the same system. The coexistence of taxes can be explained only by factors that varied
among activities. For example, if the distribution of production risks was the primary

13

consideration, then one would have expected output taxes to consist of the highest risk products.
The typical mixture of input and output taxes observed in Ottoman taxation, however, does not
seem to support this expectation. Some of the products that were subject to input taxes were
actually more prone to product failure due to pests, disease, and severe weather than some of the
other products that were subject to output taxes. For example, whereas all fruits and vegetables,
regardless of their delicateness and perishability, were typically subject to input taxes, some of
the hardier grains were subject to output taxes. 18 Moreover, if the distribution of production
risks was the primary consideration, then there would have been no reason for input and
enterprise taxes to coexist as subcategories of production taxes. Under both types of taxes, the
tax amount would have been independent of the actual level of output and the taxpayer would
have thus assumed all the risks. 19

MEASUREMENT COSTS AND THE TAX SYSTEM


For a more satisfactory explanation of Ottoman taxation, let us turn to transaction cost
economics. In market exchange the transaction costs include the time, effort, and other resources
used in locating parties to trade with, negotiating the terms of the trade, and drawing up and
enforcing contracts. In the transaction cost approach to the analysis of organizations and
institutions, their presence and form are treated as the results of choice, subject to the constraints
of transaction costs. If these costs were zero, it would not matter which institutional or
organizational form is chosen for production or exchange activities. But when transaction costs
are positive, the efficiency principle requires that the form that best economizes on these costs
should be adopted. Various organizational arrangements can thus be explained in terms of how
the costs of transactions vary among alternatives. By focusing on transaction costs, economic

14

historians have been able to explain a variety of institutional arrangements, including the firm,
sharecropping, and manorial contracts.
Although the transaction cost approach has been used primarily in the analysis of private
organizations and institutions, it can easily be extended to the analysis of the public sector and
tax systems. If the transaction costs were zero, it would make no difference which base the
government uses to tax an economic activity. In taxing production, for example, the government
can raise the same amount of revenue by any combination of input, output, or enterprise taxes,
ranging from levying the amount on only one of them to an equal or varying amounts of each.
But in a world complicated by transaction costs, the cost may vary significantly among taxable
activities and bases, making it costlier for the government to collect taxes by some methods than
others. In that case, the difference in transaction costs may explain why some activities are taxed
by one type of a base rather than another.
The transaction cost that is most relevant in studying taxes is the cost of measuring the
tax base. 20 These are simply the time and resources required to determine the value of the tax
base, such as those that would be needed in classifying different types of items constituting the
base (possibly varying in shape, size, ripeness, and so on), quantifying the total amount in each
category, and estimating the monetary value. By focusing on measurement, we are able to
explain both the choice of taxable economic activities and the choice of a base for their taxation.
Efficiency in tax collection typically restricts states to tax only observable activities, and the
Ottoman state was no exception. Consumption, for example, was generally not taxed because it
was difficult to observe. Non-market exchange and productive activities that took place at home,
such as cleaning and cooking, were similarly not taxed. Instead, easily observable activities like
market exchange and agricultural and manufacturing production were taxed. Once the state

15

decided to tax an activity, it was also important to choose a tax base that could be easily
measured. It would not have been sufficient for the cost of measurement to be low to the
taxpayer himself, because he had an incentive to hide revenue whenever possible. The state or
its agents who received the taxes had to be able to measure the tax base independently at low
cost. Moreover, hiring a tax collector introduced a principal-agent problem to tax collection,
accompanied by agency costs. For example, the tax collector could make side-agreements with
the tax payer to collect reduced taxes in return for a transfer payment to himself (a bribe).
Examining differences in the cost of measurement in light of the Ottoman economy of
this period helps to understand the structure of the tax system as a whole. Trade taxes, for
example, were based on observable items like the goods brought for exchange, rather than the
costlier to observe exchange itself, which is consistent with our knowledge of the institutions and
technology surrounding exchange at this time. Similarly, because the state could not directly
observe the marginal product of labor or the income generating capacity of individuals, personal
taxes were based on the household as a whole or on observable characteristics like marital status
and land ownership.
To illustrate the importance of the cost of measurement in detail, let us focus on
production taxes and explain the choice between the output, input, or enterprise as the base in
taxing a productive activity. Comparing the cost of measurement helps to understand the
observed subcategories of production taxes, with taxes on grains levied on the output, those on
fruits and vegetables on one of the inputs, and taxes on manufacturing activities on the enterprise
itself. Once again, if the output of activities could have been measured at no cost, they could all
be taxed under the category of, say, output taxes and there would have been no need for input or
enterprise taxes. The total output would have been the tax base, and the tax amount would have

16

been determined either as a proportion of output or as its cash equivalent. In reality, however,
the cost of measurement varied significantly among activities. Whereas both the producer and
the tax collector could easily measure the output of some activities, for other activities the tax
collector had to incur significant cost in determining the quality and/or the quantity of the
output. 21
The cost to the tax collector was probably the lowest for products like cereal grains,
whose characteristics and harvest technologies made it easy to determine both the quality and the
quantity of output at low cost. Because the harvested crop was fairly homogenous for these
items, the tax collector did not have to incur high cost by inspecting the whole output closely in
determining its quality. The quantity of cereal grains could also be determined at low cost. The
technology for harvesting these products and the brevity of their harvest period made it easy for
the tax collector to observe the output, and difficult for the taxpayer to underreport it. 22 The
division of the grain output could be a fairly simple matter of, for example, first threshing all the
cut grain together and then dividing it between the parties, or similarly loading every nth wagon
(with 1/n being the tax ratio) of the harvested grain as the share of the tax recipient.
The cost of measuring the output could be considerably high for other products like fruits
and vegetables, because the total output could include products with significant variations in
size, taste, shape, and ripeness. Even when the tax collector could have observed the quantity,
the taxpayer could still increase his share of the output simply by keeping the best ones to
himself. Given the taxpayers incentive to underreport the quality by such means, the tax
collectors had to incur cost by physically being present (or hiring an agent) for close inspection
of the quality of output. Not just the quality but also the quantity of total output could be
difficult to determine for some products, in particular those with harvests lasting for a long time.

17

Because continual harvests created opportunities for such concerns as overnight theft, the tax
collector would have had to incur cost in trying to prevent any crop from being withdrawn from
division, which would have resulted in a high cost of determining the quantity independently.
Whenever the cost of measuring the output of an activity was prohibitively high, the
next-best alternative for the state could be to choose one of the inputs as the tax base. For the
input tax method to be an efficient alternative, however, the quality and quantity of the base had
to be easily observable. Land and trees, for example, were better candidates than seed, water,
fertilizers, and labor. The taxpayer could not evade taxes by underreporting the amounts of trees
and land used in production, because their amounts remained fixed during the production period
and the tax collector could easily observe them. The production tax on fruits was thus typically
levied on the number of trees, and the tax on vegetables was levied on the amount of land
allocated to them. Whenever it was expensive to measure the output of an activity but cheap to
measure one of the inputs, the activity was taxed by the input tax method.
When neither the output nor any of the inputs were easily observable, the last resort for
the state was to tax the activity as a whole. This was typically the case for manufacturing
enterprises like juice-makers and soap-makers in towns and agricultural production in remote
villages or uninhabited fields. 23 Because the cost of measuring the output or one of the inputs of
these activities would have been very high, the state determined the tax amount as a lumpsum
payment that was levied on the enterprise itself.

EXPLAINING REGIONAL DIVERSITY


The structure of the Ottoman system of taxation shared many elements with those of
preceding and contemporary states, suggesting the presence of a selection process that caused

18

these structures to converge toward an efficient ideal. Output and input taxes, for example, were
similar in principle to the basic categories of Islamic taxation of production known as the
muqsama and mis a methods. 24 Enterprise taxes were also similar to the maq method of
assessment (sometimes also called dms, a word of Greek origin from the pre-Islamic period).
These categories typically formed the basic structure of the production taxes observed in various
Islamic states that the Arab, Persian, Turkish, and other rulers had established in the Middle East
before the Ottomans. Ottoman personal taxes also resembled those of predecessor states, in
particular the Byzantine Empire. 25 The ift tax, for example, was similar in principle to the
Byzantine tax called zeugaratikion. These commonalities clearly support the view that the
observed structure of Ottoman taxes had efficiency properties that made it more desirable than its
alternatives.
Identifying the efficiency properties of the structure of taxes, however, is not the same as
claiming that the system was efficient as a whole or that it was the same efficient system that
ruled taxation in all regions of the Empire. The vast Empire that the Ottomans had built by mid
sixteenth century had inherited not only common elements but also various idiosyncrasies from
the customs and administrative practices of preceding states, and the tax system that they
developed also reflected these idiosyncrasies. There were significant variations between the taxes
observed in different regions of the Empire, some of which can be seen in Table 1.
The taxes in different regions varied in names and rate structures. Personal taxes, for
example, varied significantly. Under the conventional system observed in Asia Minor, personal
taxes were based on adult males, and the tax rate varied by marital status and land ownership.
The subjects in Hungary, on the other hand, paid personal taxes in terms of the gate (kap) tax,

19

for which the unit of taxation was the household, rather than adult males, and the tax amount did
not change by marital status or land ownership. Moreover, personal taxes were not even fully
implemented in all areas (though non-Muslim subjects throughout the empire paid a poll tax
called cizye). In Jerusalem and surrounding districts, for example, the Ottomans did not
introduce the ift tax or any other form of personal tax systematically levied on individuals or
households.
Production taxes also varied among regions. Although the usual output-tax rate was onetenth, a higher rate of one-fifth was applied in some of the provinces annexed after the midsixteenth century. 26 The rates could sometimes vary even among the villages within a region. In
the Palestine, southern Syria, and Transjordan region, for example, the rates varied between oneseventh to two-fifths in 1596. 27
Activities taxed under one category in one region could be taxed in another category in
another region. Whereas beehive taxes were levied on the output of honey as output tax (under
some circumstances) in Hungary, they were based on the hive itself as input tax in other regions.
Similarly, there could even be differences within the same type of an activity within a region, as
was the case for the taxation of olive products in the Arab lands. A clear distinction was made
between the products of Rumn trees (generally interpreted as referring to aged trees), taxed
based on output, and slm trees (younger trees), taxed based on the number of trees.
It may be possible to explain some of these differences from an efficiency view of the tax
system. Taxes may have varied between regions as efficient adaptations to local conditions. For
example, if the harvesting technology or the local stock of knowledge about the expected output
varied significantly between two regions, then measuring the tax base of a productive activity
may have been cheaper in some regions than in others, and the tax codes may have reflected
20

these differences by taxing the activity based on output in one region and based on input in the
other. This may have been the reason for why beehive taxes were based on the output of honey
in some regions and on the number of hives in others. Differences in production technology
could also have caused the tax systems to vary. Research has shown, for example, that
differences in irrigation technology was one of the reasons for the system of variable tax rates
observed in the Fertile Crescent, where the output tax rates were higher in villages with easier
access to irrigation water than in others. 28
Some of the changes the Ottomans introduced into the tax systems of some regions after
conquest also seem to support the efficiency view of the tax system. A well-known example of
such a change is how the Ottomans abolished some of the feudal labor services. Whereas under
the pre-Ottoman tax system the subjects owed labor services to their feudal lords, such as to
build a barn, gather firewood, or work on his land, the Ottomans converted these service
obligations to cash payments. Historians have often interpreted the Ottomans tendency to
commute labor services as an example of their benevolence toward new subjects. But the
phenomenon can also be viewed from an economic perspective as efficient adaptation of
previous forms of personal taxes to the Ottoman system of government and taxation. Labor
service would have been an inefficient method of payment for personal taxes. It would have
caused efficiency distortions because the tax collectors would have had to incur cost monitoring
the taxpayers, who had no incentives to work diligently for the tax collector, in order to ensure
that the tax payment is made at the required amounts. Despite the inefficiency labor services
could have survived under previous regimes because of path dependence. But a regime change
provided the Ottomans an opportunity to discontinue excessive inefficiencies and highly
undesirable elements. Although converting labor services to cash payments was by no means

21

peculiar to the Ottomans, as a centralized regime they had additional reasons for this conversion.
Tax revenues were allocated not just to military personnel but also to the central and provincial
governments. 29 Because these governments did not directly engage in production, they had no
need for labor services. Even the cavalrymen who resided in the countryside were likely to be
away from the land during the production season, fighting in the battlefield for long periods, with
limited time and ability to engage in production and maintain a large farm with heavy demand
for labor services. These factors together meant that labor service was not a viable method of
payment for personal taxes in the Ottoman Empire. The Ottomans thus significantly altered the
historical precedent by converting preconquest labor services to cash payments, providing an
example of the way economic principles shaped the selection from available methods of taxation.
It is difficult, however, to explain all components of the Ottoman tax system with
economic principles only. If efficiency was the sole driving force in tax design, then the truly
efficient system would have replaced all others, and regional differences would have been mere
adaptations of this system to local conditions. But there are numerous other regional differences
that are difficult to explain with economic principles or with an efficiency view of institutions.
Consider some of the differences in tax bases and rate structures observed in the Empire.
Among personal taxes, for example, numerous differences existed between regions in not just the
local names of personal taxes but also in their bases and rate structures, raising the question of
why the more efficient ones did not replace others. If it was more efficient to vary the rates of
personal taxes based on the characteristics of adult males (because of, for example, varying
abilities to pay), as was the case under the ift tax system, then one would have expected
personal taxes observed in the Balkans (where the payment was based on the household as a
whole, rather than individuals) to be replaced by the ift tax system. Similarly, if a uniform rate

22

for output taxes was more desirable, one would have expected it to replace the rate structure
observed in parts of the Fertile Crescent with rates that varied between villages. But in both
cases the Ottomans simply adopted the prevailing taxes and rate structures, making no systematic
attempt to change things one way or another. They did not extend the ift tax system to the
Balkans or the Fertile Crescent. Neither did they change the output tax rates that varied between
villages in the Fertile Crescent to a uniform-rate system that prevailed in the rest of the Empire.
It is difficult to explain such continuities of sharply different rate structures merely as efficient
adaptations of the tax system to local conditions.
These examples indicate that certain institutions were more flexible than others and
history was less of a constraint in some areas than in others. Although the Ottoman
governments ultimate objective in designing the tax system may have been to maximize tax
revenues, they could not seek efficiency and minimize transaction costs as they wished. They
needed to work within the parameters of various institutional constraints. But they were not
completely bound by these constraints either. The challenge is to sort out these cases, and this
paper contributes to this task.
One of the institutional constraints that could have affected the Ottomans choice of taxes
was the legal system. Kuran has shown various ways in which Islamic law affected the
institutional endowment of the Middle East.30 For example, the Islamic inheritance rules and
contract law restricted the organizational forms available for business enterprises, and the
rigidities of law governing pious foundations inhibited their autonomy and the provision of
public services. It does not seem, however, that the legal system introduced significant rigidities
into the tax system. There were two mechanisms for the Ottomans to avoid legal obstacles in tax
design. The first was to take advantage of the controversial but legally recognized catch-all

23

category of customary taxes. Turkish states traditionally adopted a dual legal system particularly
in public administration and taxation. 31 The taxes that did not fit clearly into Islamic law could
thus still be considered legal as belonging to the category of customary taxes. This was
particularly useful in designing the tax code of a newly conquered area, where the Ottomans
could adopt existing taxes under this category, rather than be forced to overhaul the tax system
according to the principles of Islamic taxation. Various forms of personal taxes, for example,
were incorporated into the Ottoman tax system as customary taxes. The Ottomans preserved
even some taxes that were in conflict with general Islamic principles. Taxes on producing wine
and raising swine, for example, were preserved in the Balkans, even though the consumption of
alcohol and pork was banned under Islam. Although there were occasional debates within
Ottoman hierarchy about the legitimacy of some of these taxes or the customary category as a
whole, the presence of the category for the most part prevented the legal system from being a
significant obstacle in tax design.
The other mechanism to avoid legal obstacles was to take liberties in interpreting the
Islamic law itself. There were times when the shifting balance of power within the Ottoman
government limited the independence of customary taxes from the Islamic law. Those designing
the taxes were under pressure to justify the legitimacy of taxes under Islamic law. Given the
importance of taxes for state revenues and the flexibility of Islamic law on taxation, however, the
pressure was not necessarily a significant constraint. If they so wished, legal scholars could take
liberties in interpretation that were in line with the interests of the government, for example by
trying to fit customary taxes inherited from non-Islamic predecessors into the categories of
Islamic law. This was the case when Ebus-Su ud Efendi, the famous minister for religious
matters (eyhlislam) of mid-sixteenth century, offered an interpretation of the ift tax as

24

belonging to a category of Islamic taxes called mis a, even though it was clearly developed
after the feudal practices of previous non-Islamic states and thus had a different origin.
Although the legal system may have been an insignificant constraint on the choice of
taxes, political obstacles were significant. There were at least two sources of rigidity in Ottoman
politics with significant influences on the tax system. The first was from various pressure groups
with vested interests in the prevailing system of taxation. This was most evident during
conquests, which naturally aimed to alter previous forms of tax and property relationships while
establishing the Ottoman rule. But in regions of power strongholds the process often required
the Ottomans to take a gradual approach in changing the tax system, if at all. 32 In eastern Asia
Minor, for example, they preserved the rights of some landholders to collect taxes (under a
system called mlikne dvn). They similarly preserved the preconquest taxes and taxcollection rights in other regions and made concessions to some tribes or recognized their semiautonomous status with respect to taxation. The objective in these compromises and concessions
was not to minimize transaction costs or to maximize the tax revenue, but to establish the
Ottoman rule within the institutional constraints of conquest politics. Any attempt to understand
the postconquest tax systems of these regions would thus have to examine the rigidities created
by the relative powers and interests of established political groups.
The second source of rigidity was the general population of taxpayers. Opposition to
taxes has been one of the most common reasons for popular uprisings in history. 33 Taxpayers
naturally resist higher taxes, and they prefer stable, secure incomes. This type of resistance may
also have been most evident during conquests. Unless changing taxes would have clearly
eliminated excessively oppressive elements of the previous tax system (as may have been the
case for labor services), the general population would have been likely to prefer status quo over

25

change, for fear that change might mean higher taxes and worse conditions. And they could
have even fled the land or revolted against the new regime if the changes were perceived to be
too burdensome. Even if an existing tax system was known to be inefficient, therefore, the
Ottomans had to carefully weigh their desire to change the system against the possibility of
political instability. An inefficient tax system could have thus survived if political rigidities
prevented a ruler from changing it.
Given the political realities surrounding conquest, assimilation, and stability, the
Ottomans were not free to change the tax codes as they wished. Even if they could have
increased the tax revenues in Hungary by changing personal taxes from being based on the
household as a whole to a differential rate structure based on the characteristics of its individual
members, they would have met stiff resistance from those who would have paid higher taxes.
Because of this resistance, they could not have implemented the change easily. They similarly
could not have easily changed the rate structure of output taxes in the Fertile Crescent from
discriminatory rates to a uniform rate, because this would have meant higher rates for some
villages. Political obstacles existed not just in newly conquered lands but in well assimilated
regions as well. Once the tax code of a region was adopted, changing it would have been
difficult because the general population accustomed to paying taxes under a familiar system and
powerful groups with vested interests in this system would have continued to resist the change.
There were various other forms of institutional rigidities against changing taxes. Units of
measurement varied significantly between regions, making it difficult to standardize the bases
and rates of taxes across the Empire. Social and demographic institutions may also have
contributed to regional diversity. The size and structure of families and households, for example,
may have varied between regions or between ethnic and religious groups, making it difficult to

26

implement one regions personal tax system in another region, even though one may have been
more efficient or equitable than the other. Even the lingual diversity may have been an obstacle
to change. There were numerous types of scripts and languages within the Empire, setting
barriers to transplanting components of a regions tax system onto another. Even if the tax
systems of some regions may have contained inefficient or inequitable elements, institutional
rigidities may have guarded their survival.

CONCLUSION
New Institutional Economics provides rich tools and concepts that allow us to go beyond
the previously narrow frameworks of economic and historical approaches to the study of
Ottoman taxation. Whereas economic historians have conventionally studied Ottoman taxes
from a narrow historical perspective by simply identifying elements of continuity with the
precedent, this paper has also identified the properties of these elements that explain why their
continuity was desirable. Integrating economic and historical perspectives for a more complete
approach, it has examined the structure, efficiency, and regional diversity of Ottoman taxes.
The general structure of taxes made it possible for the Ottomans to economize on the cost
of measuring the tax base. Personal taxes were based not on unobservable income or
productivity but on observable characteristics like marital status and land ownership. The choice
of a base for production taxes similarly depended on how the cost of measurement varied among
bases. Taxes on some products like grains were levied on the output because the tax collectors
could easily measure the harvested output. Taxes on other products like fruits and vegetables, on
the other hand, were levied not on the output but on one of the inputs used in production because
it was cheaper to measure the amount of this input than the total output. The system of applying

27

different types of bases to productive activities allowed the Ottomans to minimize the transaction
cost of taxation. The same was true for trade taxes.
Although identifying desirable properties may be sufficient to explain some of the
regional differences in taxes within the Empire, it fails to explain others. Some of the regional
variations in the methods and rates of taxation can be viewed as efficient adaptations of the
system to the local conditions of production technology or the changing needs of public
expenditures. Other variations, however, were outcomes of not adaptation but institutional
rigidity. They reflected the way previous practices were molded into the Ottoman system of
taxation within various political, social, and other types of institutional constraints. In drafting
the tax code of a newly conquered region the Ottomans had to carefully consider the prevailing
local practices and rates of taxation, maintaining a delicate balance between efficient taxation
and political assimilation. Competitive forces toward efficient taxation must have continually
clashed with institutional obstacles against change throughout the Empire, requiring that we
integrate economic analysis of the efficiency of Ottoman taxes and historical studies of their
continuity.

28

TABLE 1
EXAMPLES OF TAX RATES IN OTTOMAN DISTRICTS

PERSONAL TAXES

TRADE
TAXES

PRODUCTION TAXES
Output
taxes

Input taxes
District (Year)

Antep (1574)

Resm-i
Mcerred
Resm-i ift (Bachelor
(Yoke Tax)
Tax)
40
6

Budapest
(1562)

Erbil (1542)

50

Bursa (1487)

33

Resm-i
Kap Goods
(Gate Brought to
Beehives
Tax) Market
1 per
2 per
camel-load beehive
of
miscellaneo
us goods
50
4 per
wagon-load
of pots and
cups
6
10 per load
2 per
of butter
beehive
and honey
9 or 12
1 or 2 per
beehive
20 per
camel-load
of linen

Jerusalem
(1562)

Malatya (1560)

50

1 per
beehive

1 per
beehive

Animals Vineyards Tax Rate


0.5 per 0.02 per
1/8
animal
vine

0.5 per
animal

4 per
dnm

1 / 10

0.5 per
animal
0.5 per 3, 5, or 10 1 / 10
animal
per
dnm
0.5 per
0.1 per variable
between
animal
vine
1/7 and
2/5
0.5 per 0.03 per
1/5
animal
vine

Notes: All monetary values are in the Ottoman currency of Ake. Dnm is a measure of land.
See the text for the definitions of personal tax items. Some figures are missing either because the
tax code did not specify the rate for those items or because the description was too detailed and

29

complex to be summarized in a single entry. Because of the customized nature of lumpsum


taxes, their rates are not reported.
Sources: Akgndz, Osmanl Kanunnmeleri and Barkan, Kanunlar.

30

TABLE 2
THE PERCENTAGE SHARES OF OTTOMAN TAX CATEGORIES

PRODUCTION TAXES

DISTRICT YEAR

PERSONAL

TRADE

TAXES

TAXES

Output

Input

Enterprise

Antep

1536

12

10

26

47

Antep

1543

54

31

Antep

1574

10

47

33

Budapest

1546

23

30

35

Budapest

1562

23

18

42

Erbil

1542

70

10

11

Malatya

1560

17

53

17

Mardin

1564

21

51

14

Jerusalem 1596

69

23

Sources: Ottoman Tapu Tahrir Defterleri (numbered 161, 186, 345, 373, 388, 406, 410, and 449
in the Prime Ministry Archives in Istanbul and 69, 72, 97, 100, 112, 117, 142, 181, 185, and 192
in the Cadastral Office in Ankara); contents published by Hseyin zdeer, Onaltnc Asrda
Ayntab Livas. (Istanbul, 1988); Gyula Kldy-Nagy, Kanuni Devri Budin Tahrir Defteri
(1546-1562). (Ankara: Ankara niversitesi Dil Tarih-Corafya Fakltesi Yaynlar, 1971);
Mehdi lhan,. Erbil Vilayeti Mufassal ve Mcmel Tahrir Defteri (H. 949/M. 1542). Belgeler

31

26(1994-95); Rafet Yinan and Mesut Elibyk, Kanuni Devri Malatya Tahrir Defteri (1560).
(Ankara, 1983); Nejat Gyn and Wolf-Dieter Htteroth, Land an der Grenze. (Istanbul: Eren
Yaynclk, 1997); and Wolf-Dieter Htteroth and Kamal Abdalfattah, Historical Geography of
Palestine, Transjordan and Southern Syria in the Late 16th Century. Erlanger Geographische
Arbeiten, Vol. 5. (Erlangen, 1977).

32

NOTES
Authors note: I gratefully acknowledge financial support of the National Science Foundation
(under Grant No. SES - 0433358) and the University of Connecticut Research Foundation. I also
wish to thank Dhammika Dharmapala, Thomas Miceli, reviewers for this Journal, and the
participants at the 2002 Annual Cliometrics Conference in La Crosse, WI and the 2003 Iowa
Alumni Workshop in Iowa City, IA for helpful comments and suggestions. Ali zdemir, Sadk
Yldrm, and Hseyin Ylmaz provided valuable research assistance.

Halil nalck [with Donald Quataert], An Economic and Social History of the Ottoman Empire,

1300-1914. 2 vols. (New York: Cambridge University Press, 1994), 1: 105. For the relationship
between the Byzantine, Balkan, Islamic, and Ottoman taxation, see mer Ltfi Barkan,
Trkiyede Toprak Meselesinin Tarihi Esaslar, lk Halkevleri Dergisi 60 (1938): 51-63, 63:
233-40, 64: 339-46 ; Michael Boyd, "The Evolution of Agrarian Institutions: The Case of
Medieval and Ottoman Serbia," Explorations in Economic History 28(1991): 36-53; Halil
nalck, The Problem of the Relationship between Byzantine and Ottoman Taxation, Akten des
XI. Internationalen Byzantinisten-Kongresses 1958 (Munich, 1960), 237-42; nalck, An
Economic and Social History. 70, 149-53; Bernard Lewis, Ottoman Land Tenure and Taxation
in Syria, Studia Islamica 50(1979): 109-24.
2

Douglass C. North, Institutions, Institutional Change and Economic Performance. (Cambridge:

Cambridge University Press, 1990), 7. For other examples and discussion, see Alexander J.
Field, The Problem with Neoclassical Institutional Economics: A Critique with Special
Reference to the North/Thomas Model of Pre-1500 Europe, Explorations in Economic History

33

18(1981): 174-98; Kaushik Basu, Eric Jones, and Ekkehart Schlicht, The Growth and Decay of
Custom: The Role of New Institutional Economics in History," Explorations in Economic
History 24(1987): 1-21.
3

See, for example, Timur Kuran, Why the Middle East is Economically Underdeveloped:

Historical Mechanisms of Institutional Stagnation, Journal of Economic Perspectives 18(2004):


71-90; Avner Greif, "Cultural Beliefs and the Organization of Society: A Historical and
Theoretical Reflection on Collectivist and Individualist Societies," The Journal of Political
Economy 102(1994): 912-50.
4

Halil nalck, Ottoman Methods of Conquest, Studia Islamica 2(1954): 103-130; nalck, An

Economic and Social History. Chapter 5; Douglas A. Howard, The Historical Development of
the Ottoman Imperial Registry (Defter-i Hakan): Mid-fifteenth to Mid-seventeenth Centuries,
Archivum Ottomanicum 11(1986): 213-30; Metin M. Cogel, Ottoman Tax Registers (Tahrir
Defterleri), Historical Methods 37(2004): 87-100.
5

For the history and types of Ottoman tax codes, see Halil nalck, Knnnme, Encyclopedia

of Islam, Second Edition, 1960; Douglas A. Howard, Historical Scholarship and the Classical
Ottoman Kanunnames, Archivum Ottomanicum 14(1995/96): 79-107. For collections of tax
codes, see Barkan, XV ve XVI. Asrlarda Osmanl mparatorluunda Zirai Ekonominin Hukuki
ve Mali Esaslar. Cilt 1: Kanunlar. (Istanbul: Burhaneddin Matbaas, 1943); Ahmed Akgndz,
Osmanl Kanunnmeleri ve Hukuk Tahlilleri. (Istanbul: Osmanl Aratrmalar Vakf, 1990).

34

Neet aatay, Osmanl mparatorluunda Reayadan Alnan Vergi ve Resimler, ADTCFD

5(1947): 483-511.
7

nalck, An Economic and Social History, 55-75.

For example, starting with this distinction, Ziya Kazc examines Ottoman taxes belonging in

the Islamic category. See, Kazc, Osmanllarda Vergi Sistemi. (Istanbul: amil Yaynevi, 1977).
For examples of problems related to the distinction, see nalck, An Economic and Social
History, 72-74; Lewis, Ottoman Land Tenure and Taxation, 119-20. For a study of Ottoman
finance procedures, Linda Darling finds it more useful to classify taxes according to the recipient
of the tax revenue. See, Linda Darling, Revenue-Raising and Legitimacy: Tax Collection and
Finance Administration in the Ottoman Empire, 1560-1660. (NY: E.J. Brill, 1996). Because of
our focus on the generation or tax revenue, issues related to their distribution are omitted here.
For a study of how transaction costs affected the distribution of Ottoman tax revenues, see Metin
M. Cogel and Thomas J. Miceli, Risk, Transaction Costs, and Tax Assignment: Government
Finance in the Ottoman Empire, Journal of Economic History. forthcoming. For an economic
analysis of Ottoman taxes in the nineteenth century, see Sleyman Sd, Osmanl Vergi Dzeni
[Defter-i Muktesid] (Isparta, 1996).
9

nalcks seminal study of Ottoman personal taxes, on the other hand, was successful precisely

because it considered the personal tax system as a whole and provided the broad categories of its
framework. See, nalck, Osmanllarda Raiyyet Rsumu, Belleten 23(1959): 575-610.

35

10

Extraordinary levies to the state called avarz- divaniyye are also omitted because of their

irregular nature during the fifteenth and sixteenth centuries. For Ottoman state revenues, see
nalck, An Economic and Social History, 55-76. For revenues as fees and fines from marriages
and misdemeanors, see Amy Singer, Marriages and Misdemeanors: A Record of resm-i ars ve
bd-i hav, Princeton Papers in Near Eastern Studies 4(1996): 113-52.
11

For a detailed account and the historical origins of personal taxes, see nalck, Osmanllarda

Raiyyet Rsumu.
12

Because the amount of land also affected these taxes, nalck insists that [t]his was actually a

system assessing peasants labor and land in combination. See, nalck, An Economic and
Social History, 149. That the tax rates also depended on ones age and marital status, however,
suggests that the taxpayer himself was the broader tax base. Although those who owned land
paid at a higher rate, even landless subjects were responsible for paying the personal tax.
13

For the complete tax codes of these and other districts, see Akgndz, Osmanl Kanunnmeleri

and Barkan, Kanunlar.


14

For urban taxes and activities in Anatolia, see Suraiya Faroqhi, Taxation and Urban Activities

in Sixteenth-Century Anatolia, International Journal of Turkish Studies 1(1979-80): 19-53.


15

These figures have been calculated from the tax information on towns and villages. The

information recorded for other potential sources of revenue, such as ruined mills or uninhabited
lands, are omitted in order to keep figures comparable across districts.

36

16

The issue for taxes is analogous to the problem of choosing among the rich variety of

contractual forms observed in history. For the contractual mix in agriculture in the American
south since the Civil War, for example, see Lee J. Alston and Robert Higgs, Contractual Mix in
Southern Agriculture since the Civil War: Facts, Hypotheses, and Tests, Journal of Economic
History 42(1982): 327-53. For medieval contracts, see Cogel, Risk Sharing in Medieval
Agriculture, Journal of European Economic History 21(1992): 99-110. For reviews of the
relevant literature, see Douglas W. Allen, Cropshare Contracts, in Peter Newman, ed. The
New Palgrave Dictionary of Economics and the Law. (New York: Stockton Press, 1998); and
Keijiro Otsuka , Hiroyuki Chuma, and Yujiro Hayami, Land and Labor Contracts in Agrarian
Economies: Theories and Facts, Journal of Economic Literature 30(1992): 1965-2018.
17

Eliyahu Ashtor, A Social and Economic History af the Near East in The Middle Ages.

(Berkeley: University of California Press, 1976), 40. In fact, long before economists justified
cropsharing contracts and output taxes on risk-sharing grounds, the Muslim scholar Ab Ysuf
had argued in favor of output taxes because input taxes (the mis a method) posed greater price
risks. For a discussion, see Frede Lkkegaard, Islamic Taxation in the Classic Period, with
Special Reference to Circumstances in Iraq. (Copenhagen: Branner and Korch, 1950), 114.
18

For the different species of food plants, see Robert W. Schery, Plants for Man. (Englewood

Cliffs, N.J.: Prentice-Hall, 1972). See also, for examples of crop production and field-crop
ecosystems in this region, Itzhak Arnon, Agriculture in Dry Lands: Principles and Practice.
(NY: Elsevier, 1992); C. J. Pearson, ed. Field Crop Systems. Ecosystems of the World. Vol 18.
(New York: Elsevier, 1992), chapter 14.

37

19

One may also propose an incentive based explanation of production taxes, based on the

taxpayers incentives to utilize resources efficiently under different categories of taxes and the
possibility of misaligned incentives between the state and the taxpayers. But the incentive based
argument does not fit the evidence well either. Although the state legally owned the land and
retained the eminent domain, the possession and usufruct rights belonged to farmers. The
taxpayers interests in using the land (or trees, animals, and other natural resources) were thus
aligned with those of the state.
20

For the importance of measurement costs in determining cropsharing contracts in modern

agriculture, see Douglas W. Allen and Dean Lueck, Contract Choice in Modern Agriculture:
Cash Rent versus Cropshare, Journal of Law and Economics 35(1992): 397-426. For the
general importance of measurement cost for the organization of markets, see Yoram Barzel,
Measurement Cost and the Organization of Markets, The Journal of Law and Economics
25(1982): 27-48.
21

Court records show frequent disputes arising from the division of harvest, which support the

importance of measurement costs for division. For harvest related disputes in the Jerusalem
court records, see Amy Singer, Palestinian Peasants and Ottoman Officials: Rural
Administration around Sixteenth-Century Jerusalem. (New York: Cambridge University Press,
1994), 90-99.
22

For the relationship between the harvest and tax collection schedules in the Aleppo region, see

Margaret L. Venzke, The Sixteenth-Century Ottoman Sanjaq of Aleppo: A Study of Provincial


Taxation. Ph.D. Dissertation, Columbia University, 1981, 135-39.
23

For evidence of increasing cost of measurement in distant villages, see Metin Kunt, The

Sultans Servants. (New York: Columbia University Press, 1983), 19.

38

24

For Islamic taxation, see Lkkegaard, Islamic Taxation; A.K.S. Lambton, Khardj,

Encyclopaedia of Islam. Second Edition. Leiden, 1962. See also, for Islamic law on land taxes, .
Baber Johansen, The Islamic Law on Land Tax and Rent. (New York: Croom Helm, 1988).
25

For the commonalities between the Byzantine and Ottoman taxes, see nalck, The Problem

of the Relationship; nalck, An Economic and Social History, 149-53; and Anthony Bryer and
Heath Lowry, eds., Continuity and Change in Late Byzantine and Early Ottoman Society. Papers
Given at a Symposium at Dumbarton Oaks in May 1982. (Washington, D.C.:Dumbarton Oaks
Research Library and Collection, 1986). For the tax systems of other contemporary Islamic
states, the Safavid and Mughal Empires, see also Shireen Moosvi, The Economy of the Mughal
Empire c. 1595, A Statistical Study. (Delhi: Oxford University Press, 1987); Willem Floor, A
Fiscal Study of Iran in the Safavid and Qajar Periods, 1500-1925. (New York: Bibliotheca
Persica Press, 1998).
26

nalck, An Economic and Social History, 112-14.

27

For a quantitative analysis of the efficiency and redistributive properties of the variable tax

rates in this region, see Cogel, Taxes, Efficiency, and Redistribution: Discriminatory Taxation
of Villages in Ottoman Palestine, Southern Syria, and Transjordan in the Sixteenth Century,
Explorations in Economic History. forthcoming.
28

Ibid.

29

For analyses of the principles for the distribution of tax revenues in the Ottoman Empire, see

Kunt, Sultans Servants; and Cogel and Miceli, Risk, Transaction Costs, and Tax
Assignment.

39

30

31

Kuran, Why the Middle East is Economically Underdeveloped.


Halil nalck, Suleiman the Lawgiver and Ottoman Law, Archivum Ottomanicum 1(1969):

108-11)
32

For Ottoman methods of conquest and assimilation, see nalck, Ottoman Methods.

33

David F Burg, A World History of Tax Rebellions: An Encyclopedia of Tax Rebels, Revolts,

and Riots from Antiquity to the Present. (New York: Routledge, 2003).

40